After a lifetime of success, it all comes down to the family legacy you’ll leave behind. How are you protecting yours?
You may have heard the old Chinese adage: “Wealth never survives three generations.”
While it may seem like nothing more than a cautionary tale, in practice, passing family wealth from generation to generation is a much more difficult task than most of us anticipate.
At Vance Wealth, we pay particular attention to preserving family legacy because, when managed correctly, wealth should help you invest forward — not disintegrate over time.
The Family Legacy Problem
Current research shows 91% of family wealth transfers fail by the end of the third generation*.
In fact, the most common reasons we fail to pass on our wealth often stem from: a lack of meaningful communication, family discord, and the destructive mentality of entitlement.
“It’s more than transferring wealth,” explained Vance Wealth President John Vance. “It’s about transferring the values and legacy that accumulated that wealth in the first place.”
5 Reasons We Lose Our Family Legacy & Wealth
1. Lack Of Meaningful Communication
It’s easy to get swept up in money talk. Engaging in structured, productive dialogue about the components of a lasting family legacy, however, requires more planning and preparation than most people expect. At Vance Wealth, we encourage conversations about the intangible values of family legacy.
“We typically guide and mediate those conversations in our office, by inviting multiple generations to the table at one time,” John explained. “Then we can have those conversations about the bigger picture.”
2. Lack Of Shared Vision
Unless you establish a shared vision for your wealth, it’s likely each family member will spend the money according to his or her own plan; yet, that kind of aimless spending could lead to the deterioration of family legacy and wealth over time.
At Vance Wealth, we help each family member understand the purpose of his or her wealth, so you can arrive at these decisions as a family — and protect them together.
3. Disregard For Intangible Wealth Assets
Most families fail to focus on the intangible assets — such as philanthropy, higher education, community involvement, a perspective of gratitude, and impactful life experiences — because you can’t easily measure the contribution of these assets with numbers.
At Vance Wealth, these intangible assets are at the center of our family legacy planning. When the conversation becomes too focused on wealth, we bring everyone back to the meaning behind the money.
4. Erosion Of Trust
When there’s wealth to be shared, there’s often trust to be lost. Communication and transparency are crucial in creating the kind of trust that binds a family together — rather than the secrecy that tears a family apart. While that doesn’t mean you need to disclose everything immediately, these conversations help family members feel like they can trust your plan for the future, so they are much more likely to honor it.
5. Attitude Of Entitlement Over Gratitude
When you’ve spent a lifetime generously providing for your family, that level of comfort can also come hand-in-hand with a decrease in productivity and motivation in the next generation. If you pass on your work ethic alongside your wealth, however, you are much more likely to ensure the survival of that wealth.
“At Vance Wealth, we discuss how to create the motivation and work ethic our clients used to amass their wealth in the first place,” John explained.
Start Protecting Your Family Legacy
If you’re struggling with communication, trust and the transfer of values, the team at Vance Wealth can help you start a new dialogue and establish a framework that protects these powerful conversations for generations to come.
We can help. To set up a consultation with one of our Wealth Advisors, please call Tara White, Administrative Assistant, at 888-775-0950.
About Vance Wealth:
Since 2003, Vance Wealth has served as a premier financial planning practice passionately committed to helping clients and families succeed at every step of their financial journey. Serving Southern California, the practice delivers innovative and comprehensive wealth management strategies precisely customized to each client’s goals and needs. Our mission is to help our clients and families succeed at every step of their financial journey, inspiring them to achieve more. We are committed to stand by their sides to help make the difficult decisions, celebrate life’s joys and be a trusted partner for every moment in between. To learn more, call 661-775-0950, email [email protected] or visit VanceWealth.com. To keep up with more exciting news, follow @VanceWealth on Facebook.
Source by Shawn Barberis and Monroe Diefendorf Jr.